Tuesday, August 16, 2011

Buffett: Tax Code Is 'Coddling the Super-Rich'

Warren Buffett, chairman and CEO of Berkshire Hathaway, said in a New York Times editorial Monday that those making over $1 million and $10 million per year should be taxed at higher rates.
The editorial, “Stop Coddling the Super-Rich,” argued that the income of investment managers and stock futures index traders is taxed at only 15 percent. Buffett, who has an estimated net worth of $50 billion and is No. 3 on the Forbes list of the world’s richest people, estimates that he is taxed at a rate of 17.4 percent.

“Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744,” Buffett wrote in the editorial. “That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”

Buffett wrote that many wealthy Americans pay a relatively low percentage of their income in payroll taxes, compared to the middle class, and that higher tax rates on capital gains, dividends and income would not hurt investment or job creation. He contended that most investors do not avoid investment based on tax rates.
Buffett said that he would leave tax rates for 99.7 percent of taxpayers unchanged and continue the current payroll tax cut of 2 percent. He argued for higher tax rates for those making over $1 million and over $10 million, including higher rates on their dividends and capital gains.
“My friends and I have been coddled long enough by a billionaire-friendly Congress,” Buffett wrote. “It’s time for our government to get serious about shared sacrifice.”
What do you think? Tax rates have taken center stage since this summer's debt ceiling debate. Does Buffett have a point, or do the wealthy pay enough in taxes as it is?

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